2015-07-17 00:00:00 Self Employed English Transforming your idea into a business is the hard part, but it doesn’t have to be. https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/03/Self-Employed-Artist-Refine-Idea.jpg https://quickbooks.intuit.com/ca/resources/self-employed/refining-your-idea/ Refining Your Idea

Refining Your Idea

4 min read

Having a business idea is great. Being truly passionate about that idea is even better. Unfortunately, some people let their excitement get the best of them and never fully develop their idea before they start their business.

Far too many entrepreneurs come up with ideas they believe are going to be next big thing without ever taking the time to look at how their idea will fit into other people’s lives. They go out and spend all their money on developing a business around a product or service and then are shocked later on when nobody is buying.

So where do you start? In her book “All In Startup,” Diana Kander puts it simply when she says that anyone starting a business should be able to easily answer the following question:

“I am helping (Description of customer) solve the problem of (XXX) by offering (XXX).”

Before you start filling in the blanks, let’s take a look at the different parts that make up that question.

Who are you helping?

These are the people who will be buying your product so you really have to know them before they can get to know what you’re offering.

  • As the staff at entrepreneur.com put it, “If you don’t know whom you want to do business with, you can’t make contact.” And if you can’t make contact, you can’t make your pitch, so you’re simply wasting your time.
  • Narrow down your potential customer is by listing some basic demographics. Canadabusiness.ca has a basic list to help you get started:
    • Age, usually given in a range (20-35 years)
    • Sex
    • Marital status
    • Location of household
    • Family size and description
    • Income, especially disposable income (money available to spend)
    • Education level, usually to last level completed
    • Occupation
    • Interests, purchasing profile (what are these consumers known to want?)
    • Cultural, ethnic, racial background
  • Once you’ve confirmed your customer demographic, you can further narrow down your idea with questions that identify the type of person (or business) you’re targeting. The more specific you can be, the better. Let’s say you’re thinking of a new product for runners. Why not drill down and specify what kind of runner. Beginner? Pro? Recreational? Fair-weather? Where do they run? Indoors? Outdoors? On trails? Runners who wear a certain kind of shoe? Etc.

What problem are you solving?

  • Diane Kander says, “people buy solutions to their problems, not products or services”. She further breaks down problems into two categories: headaches and migraines. You need to find the migraine problem or make sure your idea addresses it. This is the problem that people will pay anything to solve because it’s more than just an annoyance like a headache.
  • One way to find out if people are willing to spend money on a problem is by talking to them. These would be the people you identified in your demographics. Be careful, however, to let your potential customers describe their migraine problem; don’t lead them into agreeing that your idea will solve the problem you think they have. You may get many people who agree with you when you talk about a specific problem, but getting someone to open their wallet and buy your solution is a different level of commitment.

What are you offering?

  • This question may seem simple enough to answer but really that’s because you’re the one that came up with the product/service and know everything about it. The tricky part here is defining your offering in a clear and concise way that everyone can understand. Colin Sprake from mymsuccess.com says, “…you need to be able to write down what you do on the back of a matchbox. That means it has to be short, to the point and informative so people do not need to spend large amounts of time understanding what you do!”
  • To help you down this path, allbusiness.com has outlined some questions to ask yourself when explaining your product and services in a business plan. While you’re not write an entire business plan here, some of the questions still apply to validating your main idea:
    • Am I being too technical?
    • Am I assuming readers will have too great a knowledge base?
    • Am I using terms that are unfamiliar to anyone outside of the industry?
    • Am I using “buzzwords”?
  • When you think you’ve got a good description of your offering, go out and ask people to read it and see if they understand it the way you want. If there’s any confusion or misperception, then you still have work to do.

Once you’ve answered all these questions and tested your idea on your potential customers, you’ll see what started as just an idea will have turned it into a clearly defined statement that you can build a business around.

Image: Copyright free from https://stocksnap.io/

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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